The Resource A qualitative evaluation of income tax designs for the informal economies in Pakistan and Thailand

A qualitative evaluation of income tax designs for the informal economies in Pakistan and Thailand

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The item A qualitative evaluation of income tax designs for the informal economies in Pakistan and Thailand represents a specific, individual, material embodiment of a distinct intellectual or artistic creation found in International Bureau of Fiscal Documentation.

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This paper is concerned with the use of appropriate presumptive income tax (PIT) designs for small business in large informal economies. As informal economies hamper income tax implementation by adversely affecting compliance behaviour, developing countries mostly rely on PIT. This paper analyses the PIT designs for small businesses in Pakistan and Thailand for their ability to tackle the informal sector. The regimes are primarily tested against their adherence to the principles of a good tax system. The findings suggest that both regimes, being turnover-based PIT designs, are difficult to enforce. In terms of efficiency and equity, the Thai PIT design is relatively better than the Pakistani PIT design for taxing the informal sector

This paper is concerned with the use of appropriate presumptive income tax (PIT) designs for small business in large informal economies. As informal economies hamper income tax implementation by adversely affecting compliance behaviour, developing countries mostly rely on PIT. This paper analyses the PIT designs for small businesses in Pakistan and Thailand for their ability to tackle the informal sector. The regimes are primarily tested against their adherence to the principles of a good tax system. The findings suggest that both regimes, being turnover-based PIT designs, are difficult to enforce. In terms of efficiency and equity, the Thai PIT design is relatively better than the Pakistani PIT design for taxing the informal sector